This Community Financial Report shows a summary of the financial statements
Council achieved an operating surplus of $6.3M for the year ended 30 June 2010 compared to a surplus of $2.2M for the previous year. The improvement was largely due to the recognition of the discount ($8.7M) on the interest free loan from the NSW State Government. Offsetting this to a large extent was an increase in depreciation expenses of $11.7M, largely due to the revaluation of Council transport assets in 2009-10 in accordance with accounting requirements.
Council’s other assets, such as swimming pools, parks and reserves will also be revalued during 2010-11. While the increased value of assets improves Council’s balance sheet, it also results in increased depreciation charges which are refl ected as operating expenditure.
In 2009-10 the net operating result before capital grants and contributions was a defi cit of $6.2M, which is a $4.2M improvement on the 2008-09 defi cit of $10.4M. In light of this result Council is faced with the challenge of ensuring there are suffi cient funds to provide
for renewal and maintenance of long lived assets such as roads, bridges, buildings and recreation facilities that are an integral part of services provided by Council. To meet this Council needs to gradually reduce the proportion of resources spent on day to day activities and increase the funding for asset renewal and refurbishment. There is also a need to increase overall funding to help close the gap.
|
Council Operating Results |
Actual
2008-09 ($M) |
Actual
2009-10 ($M) |
Budget
2010-11 ($M) |
|
Expenditure |
191.42 |
207.30 |
222.15 |
| Revenue |
181.02 |
201.13 |
195.10 |
|
Net Operating Result before Capital Grants & Contributions - Surplus/(Deficit) |
(10.40) |
(6.17) |
(27.05) |
|
Capital Grants & Contributions |
12.64 |
12.44 |
5.28 |
| Net Operating Result - Surplus/(Deficit) |
2.24 |
6.27 |
(21.77)* |
* The Adopted Budget for 2010-11 forecasts a defi cit Net Operating Result of $21.8M which represents a deterioration of $28.0M compared to 2009-10 ($6.3M surplus). This is largely due to a number of positive outcomes in 2009-10 including capital grant income through the Federal Stimulus funding ($7.7M), contributed assets ($1.7M), prepayment of 2010-11 Federal Assistance Grant ($3.3M), recognition of the discount on interest free loan ($8.7M) and higher level of investment income ($1.7M). 2010-11 also includes additional depreciation expense of $4.4M refl ecting higher asset values. The 2010-11 Budget is based on underlying expenditure and income trends without any recognition of unusual items. It is expected that these projections will improve through the recognition of contributed assets.